Dominion Investments Pty Ltd v Total Vision Design Pty Ltd
[2000] WASC 195
•1 AUGUST 2000
DOMINION INVESTMENTS PTY LTD -v- TOTAL VISION DESIGN PTY LTD & ORS [2000] WASC 195
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2000] WASC 195 | |
| Case No: | CIV:2464/1999 | 28 JUNE 2000 | |
| Coram: | MASTER SANDERSON | 1/08/00 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Leave to amend granted | ||
| PDF Version |
| Parties: | DOMINION INVESTMENTS PTY LTD (ACN 078 465 362) TOTAL VISION DESIGN PTY LTD (ACN 088 977 860) ALFONSAS BARRY BALTINAS STEPHEN ALEXANDER JAMES MARU |
Catchwords: | Practice and procedure Application for leave to amend writ and statement of claim Turns on own facts |
Legislation: | Trade Practices Act 1974, s 82, s 87 |
Case References: | Dominion Investments Pty Ltd v Total Vision Design Pty Ltd & Ors [2000] WASC 130 Evans v James, unreported; FCt SCt of WA; Library No 970376; 31 July 1997 Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281 Marks v GIO Australia Holdings Ltd (1998) 158 ALR 333 Nationwide News Pty Ltd v Wiese (1990) 4 WAR 263 Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 A F & M E Pty Ltd v Aveling (1994) 14 ACSR 499 Cachia v Isaacs (1985) 3 NSWLR 366 Dalgety Australia Ltd v Ruben, unreported; FCt SCt of WA; Library No 5485; 24 August 1984 Day v William Hill (Parklane) Ltd [1949] 1 KB 632 Elkington v Moore Business Systems Australia Ltd (1994) 15 ACSR 292 Gould v Vaggelis (1985) 157 CLR 215 Hospitals Contribution Fund of Australia v Hunt (1983) 44 ALR 365 Jingellic Minerals NL v Abigroup Ltd (1992) 7 WAR 566 Kimberley Downs Pty Ltd v Western Australia (1986), unreported; Library No 6414; 25 August 1986 Lambidis v Commissioner of Police (1985) 37 NSWLR 320 Port of Melbourne Authority v Anshun (1981) 147 CLR 589 St George Bank Ltd v MJK Pty Ltd (1999), unreported; FCA No 1752; 21 December 1999 Toteff v Antonas (1952) 87 CLR 647 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
TOTAL VISION DESIGN PTY LTD (ACN 088 977 860)
First Defendant
ALFONSAS BARRY BALTINAS
Second Defendant
STEPHEN ALEXANDER JAMES MARU
Third Defendant
Catchwords:
Practice and procedure - Application for leave to amend writ and statement of claim - Turns on own facts
Legislation:
Trade Practices Act 1974, s 82, s 87
(Page 2)
Result:
Leave to amend granted
Representation:
Counsel:
Plaintiff : Mr M L Bennett
First Defendant : Mr T O Coyle
Second Defendant : Mr T O Coyle
Third Defendant : Mr T O Coyle
Solicitors:
Plaintiff : Bennett & Co
First Defendant : Phillips Fox
Second Defendant : Phillips Fox
Third Defendant : Phillips Fox
Case(s) referred to in judgment(s):
Dominion Investments Pty Ltd v Total Vision Design Pty Ltd & Ors [2000] WASC 130
Evans v James, unreported; FCt SCt of WA; Library No 970376; 31 July 1997
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1
Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281
Marks v GIO Australia Holdings Ltd (1998) 158 ALR 333
Nationwide News Pty Ltd v Wiese (1990) 4 WAR 263
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514
Case(s) also cited:
A F & M E Pty Ltd v Aveling (1994) 14 ACSR 499
Cachia v Isaacs (1985) 3 NSWLR 366
Dalgety Australia Ltd v Ruben, unreported; FCt SCt of WA; Library No 5485; 24 August 1984
Day v William Hill (Parklane) Ltd [1949] 1 KB 632
Elkington v Moore Business Systems Australia Ltd (1994) 15 ACSR 292
Gould v Vaggelis (1985) 157 CLR 215
(Page 3)
Hospitals Contribution Fund of Australia v Hunt (1983) 44 ALR 365
Jingellic Minerals NL v Abigroup Ltd (1992) 7 WAR 566
Kimberley Downs Pty Ltd v Western Australia (1986), unreported; Library No 6414; 25 August 1986
Lambidis v Commissioner of Police (1985) 37 NSWLR 320
Port of Melbourne Authority v Anshun (1981) 147 CLR 589
St George Bank Ltd v MJK Pty Ltd (1999), unreported; FCA No 1752; 21 December 1999
Toteff v Antonas (1952) 87 CLR 647
(Page 4)
1 MASTER SANDERSON: This is the plaintiff's application for leave to amend its writ and statement of claim in terms of minutes dated 28 June 2000. On 23 May 2000 Acting Master Chapman struck out an earlier version of the statement of claim and gave leave to re-plead: see Dominion Investments Pty Ltd v Total Vision Design Pty Ltd & Ors [2000] WASC 130. To fully appreciate the objections raised by the defendants to the present minute, it is necessary to say something about the facts of the case.
2 The plaintiff says that in or about mid-November 1998 a meeting took place between representatives of the plaintiff and representatives of the defendant. It is said that during the course of that meeting certain representations were made in relation to a residential apartment development in Mount Street, West Perth. Sixteen separate representations are pleaded in par 4 of the statement of claim. Particulars of the representations are provided. It is said further that flowing from the representations there were certain implied representations: see par 4A. It is then pleaded that the representations, both express and implied, were conduct in trade and commerce within the meaning of the Trade Practices Act 1974.
3 There then follows par 6 of the statement of claim which is in the following terms:
"6. In reliance upon and induced by the Representations and the Implied Representations, the Plaintiff entered into an agreement with the First Defendant, the Second Defendant, Carnegie Capital Properties Pty Ltd ACN 085 004 600 ('CCP'), and Kingspark Investments Pty Ltd ACN 085 572 201 ('Kingspark') as trustee of Kingspark Property Investment Trust ('Kingspark Trust') for the finance of the Development and the sharing of profits derived from the Development ('the Agreement').
- 6.1 The Plaintiff, the First and Second Defendants, CCP and Kingspark agreed, inter alia, that:
6.1.1 CCP would arrange for $2,000,000 to be invested into Kingspark Trust from an investor namely Claude John Mancini of 7 Kooyanga Cross, Jandakot ('Mancini');
(Page 5)
- 6.1.2 Mancini and CCP would receive the first $1,800,000 in profit as owner of A class units in Kingspark Trust and the Baltinas Family Trust and the Plaintiff would receive the remainder of profit as owners of B class units in the Kingspark Trust;
- 6.2 the First Defendant would:
6.2.1 provide architectural services for a fee of $140,000 to be paid by Kingspark;
6.2.2 be paid by CCP $50,000 by way of project management fees at day of settlement, including, inter alia:
1. identification of the Land;
2. purchase of the Land;
3. negotiation of 'the most cost-effective rate per square metre';
4. liaison with real estate agents 'to establish what the current market demands are';
5. preparation of feasibility study;
6. conduct of site investigations of sewer location, site levels and boundary locations survey, and liaison with structural engineers and builders;
7.liaison with City of Perth Approval Services Unit;
8. payment of deposit to acquire the land and be liable for interest to the previous owners of the Land;
9. liaison with David Hartree Design Associates;
10. preparation of preliminary specifications;
11. liaison with Ministry of Planning;
12. taking of survey photographs;
(Page 6)
- 13. engagement of HTW for valuation;
14. engagement of a surveyor;
15. liaison with solicitors for contracts of sale;
16. arrangement of marketing brochures;
17. organisation of preliminary advertising;
18. arrangement of a pre-sale of Unit 8 of the Development;
- 6.2.3 by paid by CCP other project expenses of $8,875 at the day of settlement;
as set out in a draft contract dated 3 March 1999 between Kingspark, the First Defendant and David Hartree Design Associates Pty Ltd ('the Hartree Service Contract').
- 6.3 The Agreement is in writing, as evidenced by:
6.3.1 the Unit Trust Deed for the Kingspark Property Investment Trust dated 11 February 1999 as amended;
6.3.2 the Resolution of Trustee and Unit Holder of the Kingspark Property Investment Trust dated 11 March 1999;
6.3.3 Mortgage H188963 in favour of Mancini;
6.3.4 letter from the First Defendant to CCP dated 29 March 1999;
6.3.5letter from the Second Defendant to CCP dated 9 March 1999; and
6.3.6 the Service Contract."
(Page 7)
5 Paragraph 13 pleads the losses allegedly suffered by the plaintiff. As yet, not all of the units in the development have been sold and the plaintiff is unable to say with certainty what its loss might be. That is a complicating factor in the case as a whole. However, what is clear is that the plaintiff is claiming that the units as completed, being smaller than the units as originally represented by the defendants, will sell for less than they would have done had it been possible to build the bigger units. The plaintiff claims that as a consequence, its B class unit (as referred to in par 6.1.2) would be worth less than would otherwise have been the case.
6 The defendants raised a number of objections to the pleading. First it was said that the plea in par 6 of the minute did not adequately set up a plea of conduct in reliance on the representations because the particulars did not support there being an agreement which is alleged as a material fact. It may be that the use of the phrase "the Agreement" in par 6 is unfortunate. It tends to suggest some form of contractual arrangement between the plaintiff and the defendants. However, what is pleaded in par 6 is conduct and it is conduct which, it is said, was undertaken in reliance upon the representations. That is all that is required for a s 52 plea. On that basis I am satisfied the plea is proper.
7 It was further submitted that par 6 of the minute was very similar to par 6 of the former statement of claim and this paragraph was struck out by Acting Master Chapman. In the circumstances the defendant said that it was improper for the plaintiff to re-plead in almost precisely the same terms: see Nationwide News Pty Ltd v Wiese (1990) 4 WAR 263 at 267, 271. A reading of Master Chapman's decision makes it plain that while the learned Master expressed reservations about par 6, the plaintiff had accepted that the paragraph needed to be re-pleaded. In my view, the learned Master's decision does not in any way preclude the paragraph being re-pleaded in its present form.
8 The second argument put by counsel for the defendants and the one pressed most strongly relates to the damages claimed pursuant to the trade practices aspect of the claim. In summary the defendants say that what the plaintiff claims is expectation loss - that is to say, the difference between the profit which would have been made if the representations were true and the profit likely to be made if it is established the representations were not true. The defendants argue that damages cannot be awarded on this basis. They rely upon what was said by the majority in Marks v GIO Australia Holdings Ltd (1998) 158 ALR 333, Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1.
(Page 8)
9 The damages which may be claimed under s 82 and s 87 of the Trade Practices Act is not always easy to resolve. Apart from the two cases I have already mentioned, the question was considered by the High Court in Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 and Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281. In this Court, Owen J undertook an exhaustive examination of the authorities in Evans v James, unreported; FCt SCt of WA; Library No 970376; 31 July 1997. In Marks v GIO (supra) the majority gave some examples of situations where expectation damages could not be claimed. They said (at 348):
"If a person agrees to pay $50,000 for goods which the vendor represents are worth $100,000 but which are, in fact, worth $50,000, what loss has the purchaser who is misled suffered by agreeing to buy (assuming no more is known)? If a person agrees to pay interest at the rate of 10% for a loan which the lender falsely represents would ordinarily command interest at a rate of 15% but which, in fact, would ordinarily command interest at 12%, what loss has the borrower who is misled suffered by agreeing to borrow (again, assuming no more is known)? And so the examples could be multiplied."
10 In this case the question might be framed in the following way: what loss has the plaintiff suffered, when having paid nothing for the B class units, at the end of the development it is left with the value of the units being $236,000 rather than $570,000? This formulation ignores what the plaintiff was to do to earn its interest. So the question might be put, more fairly, as follows: what loss has the plaintiff suffered when it undertook work which it expected would yield it $570,000 but has only yielded $236,000?
11 This case is not the simple contract position postulated in the examples given by the majority in Marks. At issue is the value of the plaintiff's B class units. The plaintiff says that in reliance upon the defendants' representations it acquired those B class units. If the representations had been true then the units would have had a certain value. As the representations were not true it is alleged that the value of the units is reduced by half. In my view, this is more akin to a situation where A represents to B that Blackacre is worth $100,000. Relying on that representation B acquires Blackacre for $100,000. Blackacre is, in fact, worth only $50,000. B's loss is $50,000. The damages claim is the difference between the value of the asset acquired in reliance upon the representation as against the true value of the asset. Looked at in this way I think the plaintiff's claim in its present form can stand.
(Page 9)
12 There is a further matter which was the subject of a good deal of argument between the parties. This is the question of whether or not what is claimed by the defendants to be expectation loss was argued before Acting Master Chapman. The Acting Master said (par 10 and par 11):
"The plaintiff on the other hand contends that it seeks historical losses of profits pursuant to s 82 of the Trade Practices Act and expectational loss of profit pursuant to the common law cause of action of fraudulent misrepresentation. Counsel for the plaintiff argues that damages for loss of all profits are recoverable as a result of fraudulent misrepresentation or deceit and referred me to a number of authorities to support that proposition. Counsel for the defendants submits that the cases to which the plaintiff refers do not support the argument put forward by the plaintiff.
The cases are conveniently gathered in an article by R Halson, 'Damages for the tort of deceit' (1997) LMC LQ 423. What is clear from the cases and highlighted by the article is the fact that this area of the law is not static. A claim should not be struck out at this stage if the effect may be to stifle the development of the law: Hospitals Contribution Fund of Australia v Hunt (1983) 44 ALR 365 at 373. To strike out this pleading on the basis sought by the defendants could well have this effect and I would decline to do so."
13 Both parties agreed, quite properly, that as this is an interlocutory application I am not bound by the learned Acting Master's decision. Nonetheless, it is clear the matter was fully argued before the learned Acting Master and he concluded that the plea in relation to damages, as put by the plaintiff, could be maintained. I would be loath to depart from the learned Acting Master's conclusion and I indicated to the parties that I would not do so. I therefore adopt the reasoning of Acting Master Chapman as an added reason for not striking out this aspect of the plaintiff's claim.
14 The further argument put by the defendants was to the effect that because the units have not been completed and sold the quantum of any loss sustained by the plaintiff cannot be calculated and the cause of action is therefore incomplete. Given what I have said about the claim being for diminution in value of the B class units, I am satisfied there is no substance in this objection. Furthermore, under s 87 of the Trade Practices Act it is open to the court to make an award of damages if a
(Page 10)
- party is likely to suffer loss. Although no reference is made to s 87 in the prayer for relief, in my view the claim as formulated might well allow for relief under that section and I would not be prepared to strike out the claim in its present form.
15 There was a further objection taken to the particulars contained in par 11.1.3. Counsel did not detail this objection. The paragraph in question is in fact particulars and I can see no basis upon which the particulars could be struck out.
16 There are two minor amendments which will need to be made to the pleading. Counsel for the plaintiff indicated that he intended to add certain words to the introductory paragraph to be found in "particulars of representations" appearing after par 4.16. Further, the numbering of the particulars appearing after par 11.2 is incorrect. Subject to these amendments I would allow the minute to stand.
17 I will hear the parties as to the precise form of the orders.
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